A Michigan family’s experience securing mental health treatment for their suicidal teenage son illustrates the barriers created by insurance denials in pediatric psychiatric care. After 16-year-old Johnathan attempted suicide in February, his parents placed him in residential treatment at Newport Academy in Washington following his discharge from Forest View Hospital’s inpatient psychiatric unit. However, his insurance provider denied coverage for the residential treatment five days after admission, deeming it “not medically necessary” and claiming “treatment could be provided in a less restrictive level of care”—contrary to the hospital’s discharge assessment that he was “too unstable to function outside of hospital.”
The Benz-Bushlings appealed the denial three times, each time being rejected. The final appeal was routed to an independent review company, AllMed Healthcare Management, which upheld the denial by arguing that Johnathan had made progress and was no longer experiencing suicidal ideation. According to Dr. Robert Trestman, chair of the American Psychiatric Association’s Council on Healthcare Systems and Financing, signs of improvement can become grounds for insurers to reduce care levels, though this risks backsliding in mental health treatment.
Ultimately, the family paid out of pocket for seven weeks of the nine-week recommended stay, costing tens of thousands of dollars. To cover expenses, they took out a $25,000 high-interest loan, sold rare book collections, and made significant lifestyle sacrifices. The mother left her job, and the family’s oldest daughter had to switch colleges due to tuition constraints. The family was able to reach a confidential settlement with their employer after threatening legal action.
According to 2024 research, the average monthly cost for residential addiction treatment for minors is more than $26,000, with stays typically lasting one to three months. Insurance companies use proprietary guidelines such as InterQual to assess medical necessity, guidelines the American Medical Association characterized in a 2025 issue brief as “proprietary, financially-driven criteria” that often lead to delayed care and denied coverage through profit-based motives.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.nbcnews.com/health/mental-health/insurance-denied-psychiatric-inpatient-mental-health-treatment-rcna230207